It is the due diligence and bank regulation that financial institutions and other regulated companies must perform to identify their customers and ascertain relevant information to do financial business with them.

KYC policies are becoming increasingly important globally to prevent identity theft, fraud, money laundering and terrorist financing. One aspect of KYC checking is to verify whether the customer is on any list of known fraudsters, terrorists or money launderers, such as the Office of Foreign Assets Controls (OFAC) list of Specially Designated Nationals (SDN).